UPDATE 3-Uganda to require telecoms firms to list on local bourse

* Not clear if extension is conditional on new rules (Adds MTN comment in paragraphs 12-13)

By Elias Biryabarema

KAMPALA, Sept 18 (Reuters) - Uganda will introduce a requirement for all telecoms firms to list shares on the local bourse as a condition for obtaining a licence to operate in the country, a government statement said on Tuesday.

The statement on resolutions agreed at a cabinet meeting said the move would “help mitigate capital flight, among other benefits.”

Outlining a series of changes for the telecoms industry, the statement also said the cabinet agreed at a meeting on Monday to renew the operating licence of the local unit of South African telecom company MTN Group.

However, it was not immediately clear whether that was conditional on the new requirements for operators.

The new policy will also bar operators from selling their allocated spectrum in any merger or acquisition deal.

“No operator whenever selling its stake through ‘mergers and acquisitions’ should ever have a claim on spectrum,” the statement said, adding the measure was to preclude the hoarding of spectrum by some operators.

Under the new plans, customers will also be allowed to switch providers without changing their numbers. Currently, this is not possible in the country, and customers have long complained this effectively tied them to a provider.

MTN Uganda is the east African country’s biggest telecoms firm with more than 10 million subscribers and competes with a local unit of India’s Bharti Airtel, as well as smaller companies.

MTN launched in Uganda in 1998 after acquiring a 20-year operating licence which was due to expire this year.

The sector regulator, the Uganda Communications Commission (UCC), has been reviewing its application for a 10-year extension since last year.

Last month, the UCC told Reuters it was asking MTN to agree to list its shares on the local stock exchange as a condition for the renewal.

In a statement emailed to Reuters, MTN said it was yet to receive a formal communication on the extension of its license and was also not aware whether the renewal would require a listing.

“If any additional conditions are proposed, including listing, they would have to be discussed,” the telecoms company said.

MTN Uganda has faced criticism on social media platforms such as Twitter and Facebook from some subscribers about data bundles getting used up quickly and the firm not responding to complaints.

Uganda’s telecoms sector has expanded rapidly over the last decade, but analysts say a new tax on social media use could reverse some of those gains by hitting investment. (Additional reporting by Joe Bavier in Johannesburg; Editing by Mark Potter and Adrian Croft)